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Originally Posted by phildunn
If brokers don't earn profit from spreads, how they actually earn from us?  Are they act like casino? They earn more if we lose more? |
I had a friend of mine i trust,..he made an MBA in the states and had a friend with him,..they made a joint graduation project,..they created a forex company "brokerage firm".. on paper
for this,..his colleague had to work in a real forex firm,...and he discovered that spread barely covers costs to make and create the position for the client and they make money by keeping losing positions open for themselevs after u lose and close
example if u go eur/usd long at 1.2000 and it went to 1.1900 and u lost 100 pips and got out
they do not close the position,..they take it for themselevs and they enter long at 1.1900 and as soon as it bounces up to a little value,..not necessarily a big value,..they sell for a prift of 20 pips or whatever
this is what i was told but it is not very clear to me,..anyone with a clear idea of this system,..feel free to popin